AT&T to buy T-Mobile USA for $39 bn

March 20, 2011

AT&T agreed to buy T-Mobile USA from Germany's Deutsche Telekom for $39 billion in a blockbuster deal in the wireless telecom sector, the two companies announced Sunday.

The cash-and-stock deal has been approved by the boards of both companies and would make AT&T a dominant player in the wireless telecom sector, pending regulatory approval.

"This transaction represents a major commitment to strengthen and expand critical infrastructure for our nation's future," said Randall Stephenson, AT&T chairman and chief executive.

"It will improve network quality, and it will bring advanced... capabilities to more than 294 million people. Mobile broadband networks drive economic opportunity everywhere, and they enable the expanding high-tech ecosystem that includes device makers, cloud and content providers, app developers, customers, and more."

Deutsche Telekom chairman and CEO Rene Obermann said said that AT&T "is the best partner for our customers, shareholders and the mobile broadband ecosystem. Our common network technology makes this a logical combination and provides an efficient path to gaining the spectrum and network assets."

As part of the transaction, Deutsche Telekom will receive an equity stake in AT&T that of around eight percent, and a representative of the German firm will join the AT&T board.

The cash portion of the purchase price will be financed with new debt and cash on AT&T's balance sheet. AT&T has an 18-month commitment of $20 billion underwritten by JP Morgan.

The deal will give AT&T a big boost in its rivalry with Verizon, which recently started selling the Apple iPhone with an end to the AT&T monopoly.

Analysts said the deal also helps AT&T in the so-called 4G sector offering more advanced wireless services.

"AT&T has been under attack for not being able to match the capacity of larger rival Verizon," said MG Siegler of the technology blog TechCrunch.

"And when they won the majority of the bids for the open spectrum in 2008, Verizon also had a clear path to the future. Now AT&T is taking another path: buying ."

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5 / 5 (1) Mar 20, 2011
Noooooo. I paid my way out of Att to be with Tmob a couple years back, left when top ATT VP stated they'd not have an android phone in the immediate future, laughed as they implemented bad-value tiered data plans, believing myself to be safe. This is really bad news.. Tmob and Sprint were the only two keeping unlimited data plans alive. Unlimited data is the future and its scary ATT and Verizon are going the other way with it.
5 / 5 (1) Mar 20, 2011
This is horrible news .. Here, in western Ma., ATT is held with serious disdain: having over charged and ignored the needs of so many users. They took over Cingular's system and totally failed even to update towers! They stole $200 or so from me, its an issue now with the BofA. AT&T is famous for poor performance, overcharging, and the ignoring of customer issues.
Remember that the biggest blackout in cellphone history involved ATT!
In fact, its the only company i know that actually had to develop and distribute a smartphone application that could report to ATT missed calls! like they didnt even KNOW they were occurring!
If this goes thru, 'hello, Verizon!'
not rated yet Mar 20, 2011
its not a matter of if it goes sounds like its pretty set in stone. I freakin worked for AT&T and stuck with T-Mobile while I did (much to my director's dismay)...I was an IT Mgr..not like anyone would see it anyways...
This absolutely sucks. Now it looks like I'm gonna have to switch after being with T-Mobile for over a decade.
not rated yet Mar 20, 2011
does it include the european market or just the american?
not rated yet Mar 20, 2011
D-T (majority owner in T-Mobile) needed a US exit strategy badly and ATT needed to gain market share. That they are the only 2 GSM carriers in the US makes it almost unavoidable. Like it or not, small is a liability in the communications world.
not rated yet Mar 21, 2011
The invisible hand of the market will save us all, or... wait a minuite... I thought Jesus was goining to save us... is the invisible hand the hand of Jesus

not rated yet Mar 21, 2011
Here is Latest Similar Story

Two of the four largest mobile phone operators in the US last night unveiled an audacious plan to combine, in a direct challenge to competition authorities who have already expressed concern that consumers may not always be getting a fair deal.

AT&T said it would pay $39bn (£24bn) in cash and stock to buyT-Mobile USA from Deutsche Telekom of Germany. The deal would leapfrog AT&T into the top spot in terms of US subscribers, with over one-third more customers than the current No 1, Verizon Wireless, which is 50 per cent-owned by Vodafone of the UK.

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